10:25 AM New York – U.S. stocks traded higher after trade deficit narrowed in December. Markets in Asia and Europe were higher after China reported a surge in exports to the U.S. and Europe and domestic demand improved. Oil rose to a high for the year.
Stocks in New York opened higher after U.S. trade gap narrowed and China reported a surge in exports and imports even adjusting for holiday calendar shift.
The U.S. trade deficit declined to $38.6 billion in December, 21% fall from $48.7 billion in November.
Exports increased 2.1% to $186.4 billion and imports declined 2.7% to $224.9 billion, according to the Commerce Department.
Oil imports declined to 223 billion barrels, the weakest since February 1997.
The narrower gap is likely to contribute to economic growth as businesses and consumers spend less on foreign goods.
European Leaders Agree on Smaller Budget
European markets gained after European leaders agreed on a smaller than expected fiscal budget and China reported higher than expected trade data in January lifting commodities prices.
Chinese Exports and Imports Soar
Market sentiment was bolstered after China reported higher than expected increase in trade in January. Trade surplus in January narrowed to $29.2 billion from $31.6 billion in December.
Exports rose 25% and gained 12.4% after adjusting for holiday calendar. Imports soared 28.8% and gained 3.4% after calendar adjustments.
Exports to the U.S. increased 14.5%, strongest in 10 months and the gain in exports to the European Union of 5.2% was the highest in 13 months.
Increase in import suggested that domestic demand is rising and companies are restocking inventories ahead of the holiday season.
Last year, Chinese factories were closed for a week on the account of Lunar New Year. This year the New Year falls in February.
Japanese Markets Halt 12-Week Rally
Stocks in Tokyo declined for the second day after the decline in yen paused and cautious statement from the European Central Bank president.
Sony plunged 10% after it reported eighth consecutive quarterly loss and disappointed investors who bid up stock 42% in January. Investors estimated weaker yen will help the company but only of if export sales are rising.
Stocks in Review
) surged 12.2% or $3.79 to $35.20 after the online content provider said total revenues in the fourth quarter grew 4% to $599.5 million from $576.8 million in the same period of last year.
Net income increased for the quarter in eight years when compared to a previous year quarter.